Buy, Sell or Hold: What should investors do with Asian Paints, IRCTC and Dr Reddys Laboratories?

Indian market closed lower for the third consecutive day in a row on Friday pushing benchmark indices below crucial support levels. The S&P BSE Sensex was down by more than 700 points while the Nifty50 closed below 16300 levels.

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Sectorally, selling pressure was seen in auto, metals, consumer discretionary, consumer durables, and realty stocks.

Stocks that were in focus include Asian Paints which closed with losses of nearly 5 per cent, IRCTC fell by over 6 per cent and Dr Reddy’s Laboratories rose over 2 per cent on Friday.

Here's what Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd, recommends investors should do with these stocks when the market resumes trading today:

Asian Paints: Hold

In this week, the stock has corrected by over 12 per cent. Before the sharp price cut, the stock made a couple of attempts to sustain above the 200-Day SMA, but due to constant selling pressure, it failed.

After a long time, the stock is now consistently trading below the 200-Day SMA.  We are of the view that, the short-term texture is still on the weak side, but due to the oversold situation, we could witness a quick pullback rally in the future.

The level of 2,700 and 2,650 would be the immediate support zone for Asian Paints Ltd. If the stock trades above the same, then a pullback rally will continue that could take the stock towards 2860-2920.

On the flip side, a fresh round of selling is possible if it succeeds to trade below 2650. Below which the chance of hitting 2600-2550 would turn bright.

IRCTC: Buy

On last Friday, the stock opened with a gap down and maintain weak momentum throughout the day. Currently, the stock is witnessing a non-directional activity.

Perhaps, traders are waiting for either side's breakout. For the traders, 720 -700 would be the key support areas and 800-820 would act as an immediate hurdle.  

Below 700, there is a strong possibility of a further downside up to 675-650 which can’t be ruled out. However, above 800, the pullback rally may continue till 860-880.

Dr Reddy’s Laboratories: Hold

For the last couple of months, the stock is consistently facing selling pressure. In the quarter so far, it has corrected by over 22 per cent.

After a sharp fall, finally, it took the support near 3700. It has also formed a bullish candle on the daily charts.

We are of the view that the medium-term trend is weak but due to short-term oversold formation, the reversal formation will continue in near future.

Technically, 3700-3650 would be the key support level, above which the stock could move up to 4000-4075.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)